Correlation Between Agnico Eagle and Franco Nevada
Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and Franco Nevada at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Agnico Eagle and Franco Nevada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agnico Eagle Mines and Franco Nevada, you can compare the effects of market volatilities on Agnico Eagle and Franco Nevada and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Agnico Eagle with a short position of Franco Nevada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and Franco Nevada.
Diversification Opportunities for Agnico Eagle and Franco Nevada
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Agnico and Franco is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and Franco Nevada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franco Nevada and Agnico Eagle is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Agnico Eagle Mines are associated (or correlated) with Franco Nevada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franco Nevada has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and Franco Nevada go up and down completely randomly.
Pair Corralation between Agnico Eagle and Franco Nevada
Considering the 90-day investment horizon Agnico Eagle Mines is expected to generate 1.11 times more return on investment than Franco Nevada. However, Agnico Eagle is 1.11 times more volatile than Franco Nevada. It trades about 0.07 of its potential returns per unit of risk. Franco Nevada is currently generating about 0.0 per unit of risk. If you would invest 4,981 in Agnico Eagle Mines on August 27, 2024 and sell it today you would earn a total of 3,449 from holding Agnico Eagle Mines or generate 69.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agnico Eagle Mines vs. Franco Nevada
Performance |
| Timeline |
| Agnico Eagle Mines |
| Franco Nevada |
Agnico Eagle and Franco Nevada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agnico Eagle and Franco Nevada
The main advantage of trading using opposite Agnico Eagle and Franco Nevada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, Franco Nevada can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Franco Nevada will offset losses from the drop in Franco Nevada's long position.| Agnico Eagle vs. Wheaton Precious Metals | Agnico Eagle vs. Newmont Goldcorp Corp | Agnico Eagle vs. Kinross Gold | Agnico Eagle vs. Gold Fields Ltd |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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